Getting started using LLC

[Sharon Tippett]

I have heard a good way to get started is to start an LLC to purchase a property and sell the LLC. I don't have the best credit and limited funds. I have enough funds to start an LLC and put a property under contract. Has anyone started out using this method ? Do you have any advice ? Is there anything I need to know about starting an LLC that I may need to know ? Please no negative responses. I know that I if you really want something bad enough you will find a way. Thank you , Sharon

[Addam Driver]

Hi @Sharon Tippett!

I started out with an LLC. I purchased my first rental property and did a limited warranty deed transferred it to my LLC. I'd recommend treating the LLC as a business. Get an EIN number, physical location address (other than your address), bank accounts, etc. You want to make sure it's hard for anyone to "pierce the corporate veil" so if anything happens at the property and someone wants to sue the owners, they can only reach the LLC and not your personal assets.

Selling the LLC is a good way to cut out the agent, a lot of paperwork, a lot of fees and do it in very short amount of time. I know investors who do this on a regular when they are doing flips. It's just easier.

The flip side is if you own the property inside of an LLC for over 2 years, it would be considered "aged" and normally by that time, credit has built up in the company. At this point the company would be able to stand on it's own quite well. Apply for car loans, credit cards, other loans, etc. Might be a good idea to keep the LLC just for that purpose alone.

Many options, but either way it's a good idea to have the LLC for bottom up protection.

Hope this helps!

- Addam